Are ‘Patent Trolls’ guilty of extortion and racketeering?

There are several old adages that apply here: “If you can’t beat ’em, join ’em” and “fight fire with fire” come to mind. But no matter how you say it, there is no doubt that companies who fear litigation from so-called patent trolls have a new weapon in their arsenal, thanks to bold action by California-based FindTheBest.

The CEO of FindTheBest, Kevin O’Connor, was not willing to sit back and let patent assertion entity Lumen View Technology push him around. Lumen sued FindTheBest based on a patent that covered a “system and method for facilitating bilateral and multilateral decision-making.” O’Connor did not want to pay the $50,000 to put the matter to rest and, according to Ars Technica, when O’Connor tried to press Lumen View for more information, the company threatened him with criminal charges.

O’Connor would not put up with the bullying from Lumen View and decided to fight back. He saw Lumen View’s actions as extortion, and decided to pursue that line of thinking by using the RICO (Racketeer Influenced and Corrupt Organizations) Act. RICO was originally setup as a avenue for civil suits against criminal organizations in 1970, allowing for the persecution of those who had ordered others to commit crimes.

This is not the first time that someone has tried to use the RICO act against a PAE. The Yale Journal of Law and Technology suggested such in 2009, in part because it covered intellectual property crimes and carries with it stiff penalties.

The tactic has not been entirely successful to date. In 2011, tech giants Cisco, Netgear and Motorola attempted to use it in a countersuit against a PAE known as Innovatio, which tried to sue owners of small businesses that used Wi-Fi technology. The countersuit was thrown out, however.

It remains to be seen what success FindTheBest will have with using RICO, but it gives companies another potential avenue for dealing with trolls. This, coupled with changes in patent law and a renewed federal focus on patent reform, will give businesses at least a fighting chance against the threat of patent trolls.

Senior Editor and Community Manager

Rich Steeves

Richard P. Steeves is Senior Editor and Community Manager of InsideCounsel magazine, where he covers the intellectual property and compliance beats. Rich earned a B.A....